Faced with legal and technical hurdles in allowing foreign as well as new domestic players to participate in the 3G spectrum auction, communication and IT minister A Raja on Friday said that the matter has been referred to the law ministry. As reported by FE earlier, there are technical constraints in allowing new players from entering the auction of the 3G services. Speaking to mediapersons on the sidelines of an Assocham seminar Raja said, ?either way foreign players will be allowed ; that is 74% FDI is allowed in the telecom sector. Whether there is common auction or open auction there will be no bar on foreign players?.
The problem has arisen as the department of telecommunications (DoT) and the finance ministry were keen on allowing new players to participate in the 3G spectrum auction since it would raise the government revenues, but the Telecom Regulatory Authority of India (Trai) suggested that only existing license holders be allowed to bid, otherwise the roll out would further get postponed.
The legal hurdles pointed out by experts are that foreign players would have to be given unified access service licence (UASL) to provide 3G service. Once provided, it would be difficult for the government to stop them from providing 2G services unless some amendment is not done, which could then be legally challenged.
Even if the government amends the licence prohibiting the new players from providing 2G services, a technical hurdle would arise whereby they would not be able to set up 3G networks as 5 Mhz spectrum earmarked for the players is not sufficient for rolling out new networks.
5 Mhz is sufficient for laying overlay network, over the 2G network, which only the existing players can do.
In such a scenario, the only possible way the global players can participate in the 3G bidding process is picking up stakes in Indian telecom sector.
